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FirstEnergy Solutions Files For Bankruptcy

April 2, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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FirstEnergy Solutions (FES), its subsidiaries and FirstEnergy Nuclear Operating Company (FENOC) (together, the "Filing Entities") announced that, "to facilitate an orderly financial restructuring, they have filed voluntary petitions under Chapter 11 of the Federal Bankruptcy Code with the U.S. Bankruptcy Court in the Northern District of Ohio in Akron."

The Filing Entities collectively have over $550 million in cash, "which they believe is sufficient liquidity to continue normal operations and meet post-petition obligations to employees, suppliers and customers as they come due."

Donald R. Schneider, President of FES, said, "Given the prospective timing of federal and state review and our ongoing cash needs and debt service obligations, the FES and FENOC Boards of Directors determined that the Chapter 11 filing represents our best path forward as we continue to pursue opportunities for restructuring, asset sales and legislative and regulatory relief."

FES said that it will also continue seeking legislative and regulatory relief at the state and federal level.

As previously announced, FES said that, "FES and FENOC have engaged in constructive discussions with parties representing their creditors. Those discussions are continuing as the Filing Entities explore strategic alternatives for the competitive generation businesses."

The Filing Entities have filed customary first-day motions with the Bankruptcy Court to support operations during the court-supervised process, including motions requesting authority to pay prepetition and post-petition employee wages and benefits and to continue customer programs.

In a notice to customers, FES stated, "First and foremost, you should understand that today’s [Chapter 11] announcement does not affect the viability of your contract with the Company. The electric generation you receive from FES will not be interrupted and you will see no change in the way you receive or pay for the service. FES and FENOC have over $550 million in cash, which they believe is enough liquidity to continue normal operations and meet post-petition obligations to employees, suppliers and customers as they come due. All competitive generation assets owned and operated by FES and FENOC are continuing operations and serving customers as usual."

In a notice to customers, FES stated, "The Filing Entities have filed customary first-day motions with the Bankruptcy Court to support operations during the court-supervised process, including motions requesting authority to continue to pay and honor all customer contracts and programs."

In a notice to customers, FES stated, "Both FES and our customers are bound by the current terms and conditions."

In a notice to customers, FES stated, "Our contract remains in force and in good standing with you. The Chapter 11 filing itself does not cause any customer contract to automatically be cancelled or be considered in default."

FES provides energy-related products and services to retail and wholesale customers; and owns and operates 5,381 MWs of fossil generating capacity through its FirstEnergy Generation subsidiaries. FES also owns 4,048 MWs of nuclear generating capacity through its FirstEnergy Nuclear Generation subsidiary.

The Filing Entities' parent company, First Energy Corp., and its other subsidiaries, including its regulated subsidiaries, are not part of the filing and will not be subject to the Chapter 11 process.

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